Between 2001 and 2025, Kenya's economy expanded by an average of 4.5 per cent Kenya's economy has delivered one of Africa's strongest long-term growth stories over the past two decades, lifting millions out of poverty and expanding access to jobs and essential services.
However, World Bank now warns that unless the country tackles deep-rooted structural weaknesses, those gains risk stalling, leaving millions locked out of quality employment and shared prosperity. In a new report examining Kenya's growth trajectory over the last 20 years, the lender says the country stands at a critical crossroads.
While the economy has remained resilient, sustaining growth that creates well-paying jobs and reduces poverty will require sweeping reforms in public finances, exports, productivity and climate resilience. Between 2001 and 2025, Kenya's economy expanded by an average of 4.5 per cent annually, driven largely by the services sector and other non-tradable industries, including government services.
During the same period, labour force participation increased, unemployment dropped sharply and poverty declined from 46.7 per cent in 2005 to 33.6 per cent by 2019 as more households gained access to jobs, healthcare, education and clean water. However, the Covid-19 pandemic reversed many of those gains.
Poverty surged to 42.9 per cent in 2020 before easing, but it remains above pre-pandemic levels. "At the same time, slowing economic growth, declining wages and rising debt have exposed weaknesses that were masked during years of steady expansion,'' the report reads.
The World Bank notes that Kenya's public debt had climbed to 71.3 per cent of GDP by the end of 2025, placing the country at high risk of debt distress. The withdrawal of the Finance Bill 2024 following widespread protests also underscored the growing difficulty of relying on higher taxation to finance government spending.